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Are you considering using a payment app such as Apple Pay or Google Pay? Here are the pros, cons, and draws of paying via your phone.
Pro: Fast & Convenient
You just need to tap your phone on the machine and you’re done.
Pro: Digital Security
Most mobile app payments don’t store your credit card information. They’re tokenized. Basically, they use a digital “token” as a stand-in for your personal information, and they make transactions with a one-time security code. Even if hackers got a bunch of people’s tokens, they couldn’t do anything with them since it isn’t equivalent to getting a bunch of credit card numbers.
Pro: Physical Security
Your phone data is protected with encryption and maybe biometric security. Even if a thief gets your phone, they won’t be able to access your payment app.
Pro: Reduced Clutter
One way to carry fewer cards is to put them on your phone.
Draw: Transaction History
Some mobile payment apps are compatible with budgeting and spending tracking apps. But many credit card providers offer this functionality too.
Draw: Rewards Programs
Some mobile payment apps track rewards cards. But some don’t, and some rewards cards don’t work with mobile payment apps or they require their own app. If you’re a major reward points maven, make sure your preferred program works with your desired mobile payments app.
Draw: Variety of Payment Apps
A store might accept some but not all payment apps. For example, at the time of writing, Walmart Canada doesn’t take Apple Pay, but they do take Walmart Pay.
Draw: Widely Accepted . . . But Not Universally So
Mobile payment apps aren’t an obscure payment method in 2024. Many if not most businesses take them. With that said, not everyone does, and you’d be in a bit of trouble if you didn’t have a credit card at a restaurant that doesn’t take mobile payment.
Con: Not All Phones Can Use Payment Apps
Many mobile payment apps rely on near-field communication (NFC) technology to work. But not all phones support NFC. If you have one of these phones, this conversation is kind of moot. And if you do use payment apps, you’ll have to be sure that any phone you upgrade to in the future supports NFC.
Con: Phone Reliance
Convenience can be a crutch sometimes. Sure, it’s great when everything is on your phone—until your phone’s battery dies. Or you lose your phone. Or smash the screen. Or one of any number of problems.
Con: Fees
As with any financial instrument, it’s important to look into what fees you’re paying when you use payment apps. And as with anything, it can be a nuisance to compare fees across several payment apps and then compare that data with fees for credit or bank cards.
